Frustrated with their venture into China, along with changes that no longer allow it to control its projects, Time Warner Inc. (TWX) is pulling out of the China movie business.
Their initial reason for entering the Chinese market, was based upon a temporary ruling that allowed foreign companies to own up to 75 percent of movie companies in seven Chinese cities in 2003, the Financial Express said.
In 2005, they changed the rules, disallowing any foreign control of movie companies.
"The company has no choice but to pull out," said Gao of public relations company Ruder Finn Inc, which represents the US company in China. "It didn’t pull out immediately after the rule change because of its long-term commitment to its partners. Now, it has finally decided to withdraw after many failed attempts to persuade regulators to let it maintain its majority control."
With growth in the entertainment industry increasing at an 18 percent clip, other companies have entered and invested in the Chinese entertainment market; companies such as The Walt Disney Co. (DIS), Viacom (VIA), and Eastman Kodak (EK).
The experience of Time Warner shows the volatility and risk that accompanies investment in China at this time.
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